With an ever-increasing spotlight shining on rare earths, the sleepy tourist town of Esperance on WA’s south coast could be on the cusp of becoming the next epicentre of a rare earths mineral boom. One of the major attractions of the area is the discovery of “clay-hosted” rare earths which, unlike their hard rock counterparts, can be considerably easier to mine – and they can exist in vast quantities.
Australia’s richest woman Gina Rinehart refocussed the market on rare earths recently after her company, Hancock Prospecting, backed Arafura Rare Earths’ Nolans project in the Northern Territory by corner-stoning the company’s latest $121 million capital raise to the tune of $60 million.
Rare earths have become the commodity du jour and are now tugging at the coat tails of the lithium juggernaut. Unlike lithium however that is the key component of a lithium-ion battery, rare earths are mostly found in the permanent magnets that are a critical part of an electric vehicle motor. In any case both are very much a part of the electric vehicle revolution and both will be needed long into the future in great quantities if the rise and rise of electric vehicles turns out to be real.
According to the Federal Government, China has the largest rare earths reserves, the highest production of rare earths concentrates and it controls as much as 90 per cent of global production at various value-added stages of the supply chain.
In 2021, China produced 168 kilotonnes of rare earth oxide equivalent, almost four times more than the world’s second largest producer, the United States, which pumped out 43 kilotonnes.
Federal Resources Minister Madeleine King says Australia is already the fourth largest producer of rare earths concentrate and has the potential for significant growth given the country’s high-quality deposits of both light and heavy rare earths.
Whilst the Goldfields and Pilbara regions - and even the Kimberley – are right at home hosting big quantities of minerals including battery metals, Esperance is probably better known for its sun, sea and surf.
It is its abundance of clay hosted mineral horizons however that have WA’s explorationists flocking to the area – and many have already discovered rare earths in amongst those vast, largely flat lying shallow horizons.
Back in November, OD6 Metals confirmed widespread, thick and higher-grade clay hosted rare earth elements at its Splinter Rock project near Esperance after receiving the final assays from its recently completed drill campaign.
The company says its latest assay results show that some 19 percent of the basket of rare earths it has discovered at Splinter Rock are the highly sought after neodymium and praseodymium.
Splinter Rock sits about 150km north-east of Esperance and comprises of six exploration licences spanning more than 2500 square kilometres. OD6’s Grass Patch project is up to 100km north-west of Esperance and covers a tenement area of more than 2200 square kilometres in size.
The region also has the added bonus of having significant key infrastructure including the Port of Esperance that already boasts existing exports of nickel, iron ore and grain.
OD6’s story is one of pure innovation after its founders spent months researching historic Water Corporation water quality sampling around Esperance. A Eureka moment came when it became evident that rare earths we showing up regularly in those old water samples – a discovery that ultimately led to the multi-million dollar ASX-listing of OD6.
Just last month Terrain Minerals announced an exploration blitz across its wholly owned Lort River project. The explorer discovered clay-hosted rare earth elements at the site in May where it holds three exploration tenements covering 320 square kilometres. The company has engaged Cube Consulting to assist with a strategic exploration plan as Terrain looks to define a maiden resource at the site as soon as possible. The drill program appears set to begin in the second quarter of 2023 once stakeholder approval has been secured. The company will focus on its entire 320 square kilometre tenements on a 1600m by 1600m grid as it aims to build an exploration target before the end of next year.
Mineral explorer Emu NL is also making a move near Esperance where it is targeting clay-hosted rare earths at its Condingup project and has applied for a package only 35km south-east of Splinter Rock. The company recently lodged applications to extend the project to an overall tenement area of 734 square kilometres and has applied for another three new tenement packages in the broader area totalling a further 304 square kilometres.
Meeka Metals owns 100 per cent of two exploration licences at Circle Valley outside of Esperance covering 222 square kilometres of predominantly freehold agricultural land currently used for crop and livestock farming.
Circle Valley is one of two rare earth plays the company has near WA’s southern coast with the second being Cascade to the south-west. Cascade was pegged on the back of Circle Valley’s potential and is an impressive tenure of more than 2000 square kilometres. Assay highlights from Circle Valley include 12m at 2690 parts per million total rare earth oxides, or “TREO” including 4m at 6894ppm TREO.
White Cliff Minerals recently picked up its Lake Tay project in addition to applying for a further 10 exploration licences in an area 120km south-west of Norseman. The company has signed a binding agreement with Hurricane Prospecting for the purchase of three granted exploration licences that make up the project for $30,000 in cash, $125,000 in White Cliff shares and a 2 per cent net smelter royalty. Whilst the acquisition is still subject to shareholder approval, White Cliff has moved quickly to snap up around 1850 square kilometres of land within shouting distance of the popular tourist hotspot.
Air-core drilling at Mount Ridley Mines’ namesake rare earths project nearby recently delivered the highest grade assays to date and expanded the company’s mineralisation footprint to over 1200 square kilometres. The results came in at up to 3688 parts per million TREO and were detected across a pool of nine prospects within a 20km radius of the site’s centre. The project stretches across 3400 square kilometres.
With the globe seemingly fixated on a green energy transition, the focus on renewable energy has also impacted the Esperance region with Horizon Power partnering with Pacific Energy to deliver a new integrated power system comprising a 4 megawatt solar farm, two 4.5MW wind turbines, a 4MW battery energy storage system and a 22MW high-efficiency gas power station. The clean energy system, owned and operated by Pacific Energy, will feed into Horizon Power’s network and provide cleaner, greener power to Esperance. According to the WA Government, almost 50 per cent of Esperance’s total electricity demand will now be met by renewable sources.
Another benefit for rare earths explorers in the Esperance region is the relative proximity to the Goldfields region. Lynas Rare Earths commenced construction on Australia's first rare earths processing facility in Kalgoorlie back in April that is scheduled to be operational by July next year. The plant will process rare earths concentrate from Lynas’ Mt Weld mine - one of the world's highest-grade rare earths deposits and the largest outside of China. In 2021 the Mt Weld mine accounted for around 10 per cent of global rare earth production.
Once operational, the facility could pave a pathway for additional rare earths processing in the region or possibly process ore from the Esperance region itself. The refined product could then be exported through the Port of Esperance, keeping the majority of the entire process onshore and local.
Whilst it is still early days for the current flock of explorers, the recent results have been promising and show the Esperance region could soon become a rare earths hub at a time when the commodity has never been more sought after.
With its famous Twilight beach just a quick trip in the Landcruiser away, Esperance is probably not a bad spot to develop a mineral project – at the very least, mining staff shortages often seen in the hot dusty and remote Pilbara region should not be a problem.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
